Only two Republicans voted in favor of the NYC OTB rescue plan on Tuesday. Senate Leader Dean Skelos says Republicans were left out of the NYC OTB rescue plans. ( Philip Kamrass / Times Union )

Only two Republicans voted in favor of the NYC OTB rescue plan on Tuesday. Senate Leader Dean Skelos says Republicans were left out of the NYC OTB rescue plans. ( Philip Kamrass / Times Union )

Photo: Philip Kamrass

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Senate Leader Dean Skelos talks to the media outside of his office in a hallway of the Capitol in Albany, NY on Tuesday December 7, 2010. A special session of the Senate was called for the afternoon where a vote to rescue the NYC OTB failed. ( Philip Kamrass / Times Union ) less

Senate Leader Dean Skelos talks to the media outside of his office in a hallway of the Capitol in Albany, NY on Tuesday December 7, 2010. A special session of the Senate was called for the afternoon where a ... more

Photo: Philip Kamrass

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Senate Leader Dean Skelos produced only two Republican votes in support of the NYC OTB bailout. ( Philip Kamrass / Times Union )

Senate Leader Dean Skelos produced only two Republican votes in support of the NYC OTB bailout. ( Philip Kamrass / Times Union )

Photo: Philip Kamrass

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State Sen. Roy McDonald, R-Saratoga, supports the NYC OTB rescue plan. He says Saratoga Race Course is in his district and it is important to keep the state's racing industry afloat. ( Philip Kamrass / Times Union ) less

State Sen. Roy McDonald, R-Saratoga, supports the NYC OTB rescue plan. He says Saratoga Race Course is in his district and it is important to keep the state's racing industry afloat. ( Philip Kamrass / Times ... more

Photo: Philip Kamrass

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State Sen. Roy McDonald, R-Saratoga, was one of only two Republican votes to support the NYC OTB rescue plan. He says Saratoga Race Course is in his district and it is important to keep the state's racing industry afloat. ( Philip Kamrass / Times Union ) less

State Sen. Roy McDonald, R-Saratoga, was one of only two Republican votes to support the NYC OTB rescue plan. He says Saratoga Race Course is in his district and it is important to keep the state's racing ... more

Photo: Philip Kamrass

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State Sen. Roy McDonald, a Republican from Saratoga , is concerned about Saratoga Race Course, which is in his district. He was one of two GOP votes to support keeping NYC OTB. ( Philip Kamrass / Times Union )

State Sen. Roy McDonald, a Republican from Saratoga , is concerned about Saratoga Race Course, which is in his district. He was one of two GOP votes to support keeping NYC OTB. ( Philip Kamrass / Times Union )

New York City betting clerk Matthew Konefal of Brooklyn holds his head down in the Senate gallery as a state senator casts a negative vote. The vote failed. Konefal says he has worked for NYC OTB for 10 years, while his mother has worked there for 36 years. ( Philip Kamrass / Times Union ) less

New York City betting clerk Matthew Konefal of Brooklyn holds his head down in the Senate gallery as a state senator casts a negative vote. The vote failed. Konefal says he has worked for NYC OTB for 10 years, ... more

Photo: Philip Kamrass

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New York City betting clerk Matthew Konefal of Brooklyn faces unemployment Tuesday after the state Senate failed to bailout NYC OTB. ( Philip Kamrass / Times Union )

New York City betting clerk Matthew Konefal of Brooklyn faces unemployment Tuesday after the state Senate failed to bailout NYC OTB. ( Philip Kamrass / Times Union )

Photo: Philip Kamrass

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New York City betting clerk Matthew Konefal of Brooklyn faces unemployment Tuesday after the state Senate failed to bail out NYC OTB. ( Philip Kamrass / Times Union )

New York City betting clerk Matthew Konefal of Brooklyn faces unemployment Tuesday after the state Senate failed to bail out NYC OTB. ( Philip Kamrass / Times Union )

Photo: Philip Kamrass

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A worker for DC 37, the union that represents New York City OTB workers (who did not want to be identified) leans on a railing while talking to colleagues in the Senate gallery after the state Senate failed to get the necessary 32 votes to rescue NYC OTB, in Albany. December 7, 2010. ( Philip Kamrass / Times Union ) less

A worker for DC 37, the union that represents New York City OTB workers (who did not want to be identified) leans on a railing while talking to colleagues in the Senate gallery after the state Senate failed to ... more

Photo: Philip Kamrass

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Lobbyist Jacqui Williams writes down the results of each state senator's vote in the Senate gallery as the state Senate failed to get the necessary 32 votes to rescue NYC OTB, in Albany on Tuesday December 7, 2010. Williams is a lobbyist for American Racing and Entertainment. ( Philip Kamrass / Times Union ) less

Lobbyist Jacqui Williams writes down the results of each state senator's vote in the Senate gallery as the state Senate failed to get the necessary 32 votes to rescue NYC OTB, in Albany on Tuesday December 7, ... more

Photo: Philip Kamrass

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Vote leaves NYC OTB out of money

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ALBANY -- The state Senate on Tuesday failed to pass a bill designed to keep New York City's bankrupt Off-Track Betting operations afloat, prompting the operations' board to move to an immediate shutdown. Those who supported the rescue plan claimed the defeat in the Senate puts the state's ailing horse racing industry -- including the success of the Saratoga Race Course -- in jeopardy.

After the legislation failed, NYC OTB's Chairman Larry Schwartz said that barring a "miracle," the business would shut down Wednesday.

"We are out of money. We are out of cash. We are out of business," said Schwartz, who also serves as Gov. David Paterson's secretary. Schwartz said he lobbied lawmakers making just those arguments.

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The final Senate tally was 29-21, with the measure falling short of the 32 votes needed to pass. The bill's fate resulted from the absence of several Democrats and the reluctance of all but two Republicans to support it.

"The potential (impact) is all negative," said Sen. Roy McDonald, R-Saratoga, after the vote. He and Queens Sen. Frank Padavan were the lone Republicans supporting the rescue plan.

Other Republicans said they wanted an approach that would also prop up OTBs around the state, all of which contribute money to local governments.

The Capital Region's other GOP senator, Republican Hugh Farley of Niskayuna, said he simply missed the vote, which was done on a slow roll call that lasted more than a half-hour.

"I walked in just as they closed," Farley said, adding that he got held up talking to Senate Republican Leader Dean Skelos. "I was probably going to vote for it," said Farley.

Sen. Liz Krueger, D-Manhattan, said she had committed to her conference to provide the 32nd vote, but decided to stay away when it was clear that there weren't enough Republican votes to get to 31. "I would have voted for it if that was going to be the difference between its passing (or failing)," she said. "It's very difficult to lay off 800 people ... but I don't like this bill."

Also missing were Democratic Sens. Pedro Espada, who failed to show for session last week, and Ruben Diaz Sr., a gambling opponent who was at the Capitol but didn't vote. Democratic President Malcolm Smith also missed the vote: He was traveling in China in an excused absence.

Democrat Kevin Parker was not at the Capitol because he was hearing a Brooklyn jury convict him of misdemeanor criminal mischief related to a 2009 altercation between Parker and a photographer.

Closure of the massive but money-losing NYC OTB represents a blow to the racing industry. The operation shares revenue with horse breeders and tracks such as Saratoga. With horse racing currently in decline nationwide, the internet and phone-based wagering operations that the state's OTBs operate have proven to be a lifesaver.

Sen. Eric Adams, D-Brooklyn, who chairs the Senate's Racing, Gaming and Wagering committee, noted that NYC OTB provides half of the money that betting operations send to New York horse breeders as a way to keep the industry going.

"A no vote on this bill lights the wick to a stick of dynamite that will blow up our racing industry," Adams said during the vote.

As senators took the roll call vote, some of the 900 unionized OTB employees looked down from the viewers gallery. Earlier in the day, they stood outside the Senate chamber, some carrying signs urging them to support the plan and save their jobs. All are scheduled to be laid off with the closure.

"We'll shut them tonight," NYC-OTB's President Greg Rayburn said during a press conference with Schwartz after the vote, which Rayburn said had been followed by the OTB's workers. "We've already had a number of employees just walk out."

Rayburn said the value of NYC OTB's internet and phone betting accounts -- called Advance Deposit Wagering -- will be all but wiped out if it shuts down as bettors move to other websites and phone operations.

"Once you go dark on an ADW, you're gone," he said, adding that illegal bookmakers as well as out-of-state betting operations will quickly devour NYC OTB's $700 million ADW market.

In fact, competing OTBs in New York were already seeking to lure NYC-OTB bettors to their websites. The New York Racing Association's website on Tuesday had a notice urging gamblers, "Don't get shut out," and explaining they could bet on its site. Earlier this week, the Catskill regional OTB was running ads in racing publications urging bettors to switch over.

"Each day the value of that asset becomes less and less," said Catskill OTB President Donald Groth.

The other OTBs "are out marketing," said John Sabini, chairman of the state Racing and Wagering Board, which will meet at noon Wednesday to consider "emergency measures" for dealing with the loss.

He noted that NYC OTB had $840 million in total "handle," or the amount being bet, in 2009. That was nearly 40 percent of the state's total racing handle of $2.2 billion.

Like Rayburn, Sabini said that some of the business will likely go to betting operations outside of New York State.

The ADWs were key to the Paterson plan, which called for NYRA and the Yonkers Raceway to take over much of NYC-OTB's phone and web-based betting operation in return for forgiveness on the $67 million NYC OTB owes its creditors, including NYRA. But senators from suburban and upstate regions -- mostly represented by Republicans -- wanted provisions that would boost their OTBs as well.

Skelos said his party offered legislation that would offer a "global" solution which would deal with all the state's OTBs. He said Democrats controlling the Senate and Assembly turned a deaf ear to the proposal.

"I don't see why everybody is just saying no," Skelos said. " ... We want to negotiate and get something reasonably done."

McDonald called the Democrats' measure the "worst of the evils," but said its passage was a now-or-never situation. His district includes the Saratoga track.

"Do I like the bill? I don't like the bill," McDonald said. "Why am I doing it? For Saratoga. ... The way they treated my tracks in the last couple of years has been outrageous, incompetent and maybe even corrupt. I'm tired of it."

Rick Karlin can be reached at 454-4758 or rkarlin@timesunion.com. State editor Casey Seiler contributed to this story.